Does Australia Fail in the Delivery of Major Hospital Projects?

Yet that was what happened when the Court toured the site of the $2 billion new Royal Adelaide Hospital last November, which the government alleges has faults including incorrect room sizes, air-conditioning defects, sewer pipes in a data equipment room, a 200-millimetre ceiling space and a 2.8-metre high loading dock instead of one which was meant to be 3.5 metres.

By all accounts, the project is going badly. Originally slated for technical completion on April 4, 2016, media reports suggest it is a year behind schedule and as of yet has no clear opening date. The consortium responsible for delivering the project is locked in a bitter dispute with the government about the latter’s rejection of a plan to fix defects associated with the project. In November, The Advertiser reported that investors in the new hospital would seek to recover up to $4 billion in damages from taxpayers if the government moved ahead with threats to tear up the consortium’s contract.

Things have not gone much better on the $1.2 billion Perth Children’s Hospital Project in Western Australia, where persistent delays mean there is no clear completion date with respect to a project that was originally set to finish in May 2015. There have been multiple problems on the project, including allegations of subcontractors missing out on progress payments and delays where asbestos was found in some of the Chinese roof panels.

Whilst hospitals are challenging and complex projects, these examples prompt questions as to what can go wrong and how we might improve.

According to one source who spoke on condition of anonymity, healthcare projects by nature carry with them a number of challenges.

First, there is the need to reach an agreement with nurses and doctors about what is from a functional perspective. The source said this process can involve a substantial number of people, multiple user group meetings and differing opinions which need to be worked through. In absence of strong project management skills, the source said the potential for confusion and delays at this point can be substantial.

Second, there is the challenge of managing a significant number of trades and disciplines under one umbrella program. Often, the source said, fitout and interior design elements can become detached from the construction program, potentially leading to delays where you have large volumes of concrete shell which is not fitted out properly.

Third, there is the complexity of a hospital itself, which has large numbers of individual rooms serving distinct purposes as opposed to repeating modules throughout. Whereas office buildings often involve a high-rise layout with a central services core, this is not typically achievable in the more sprawling setting of a hospital in which it is necessary to have a large number of cores doing different jobs and where it is often necessary to have plant dropped from the roof and fitted down into the various cores.

Finally, recent years have seen a number of hospital projects being undertaken largely at the same time – a phenomenon the source said puts strain upon available skills and resources.

“It’s mainly the sheer scale and the need to try to bring all of the different parties towards a single program which it all marches to,” the source said.

Nevertheless, the source said, the story was not all negative. In fact, a number of projects in Victoria have been delivered early. Whilst problems may have occurred on some projects, Australia did not have any form of overall crises when it came to delivering high quality projects within time and budget.

What is necessary is the sharing of lessons with regard to strategies which had and had not worked, the source said. For instance, the public private partnership model which has been used on several occasions in Victoria appears to have worked well and could possibly be used more often elsewhere. Furthermore, the importance of architects being active in the technical delivery of projects cannot be overstated. Architects, the source said, have a good view about how the project as a whole fits together and can provide importance guidance to contractors and subcontractors as to the big picture of the project vision as they go about their work.

Renowned construction industry advisor David Chandler is more scathing.

Chandler talks about a decline in what is considered to be acceptable involving "dumbed down clients" who are willing to pay "whatever premium is needed to transfer the risk to powerful and unaccountable contractors." He is aware of one installation of a nurse call system where low voltage shielded cables were called up (Cat 5) and a lower standard was installed. Because the LV cables were put in near HV (240v) wiring, the on/off of switches triggered the nurse call system – a problem which was discovered months after the first patients were admitted.

According to Chandler, healthcare projects are being led by large, risk averse enterprises which try to ring-fence themselves from accountability wherever possible. Many of these contractors, he says, have gone through significant ownership changes and upheaval, suffer from high staff turnover and have in some cases become distracted from the core task of building value for money.

These parties, Chandler said, hand over much of the work to consultants such as certifiers and quantity surveyors. The latter, he says, are often reluctant to challenge the overheads or procurement/packaging methods of the contractor for fear of rocking the boat and not being hired on the next job and suffer from considerable downward pressure in respect of fees and a lack of depth with regard to talent.

Meanwhile, Chandler says, main contractors have been too willing to accept excessive remuneration levels and inefficient work practices being incorporated into enterprise bargaining agreements.

Nevertheless, the anonymous source said it is important to avoid being overly negative. In fact, he said, Australia has a good record of delivering hospital environments with good design, and a number of overseas countries are in fact looking at us for leadership lessons.

“I prefer to put a positive spin on it rather than dwell on the negatives,” the source said. “I feel the people who have worked on those projects (the delayed ones) have learned a lot and there will be some particular reasons why those things have happened.

“It’s not all bad news. There are a lot of lessons which have been learned over the last 10 years. That has positioned us well for the future.”